Medtecs International Corp, a maker of medical apparel, has reported record earnings of US$131.7 million ($175.4 million) for the FY2020 ended December, compared to earnings of US$1.2 million for the FY2019.

The record earnings comes as the group reported record revenue of US$400.3 million for the FY2020 compared to revenue of US$69.0 million the year before, due to the global surge in demand for personal protective equipment (PPE) arising from the Covid-19 pandemic.

The higher earnings were also attributable to improved economies of scale and higher proportion of sales of Medtecs-branded product and PPEs.

Revenue from the Original Product Manufacturing (OPM) division surged by 576.4% -- or almost seven times – to US$357.8 million in FY2020 from US$52.9 million due to the increase in PPE demand as well as higher sales from Medtecs’ customers.

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Revenues from Hospital Services increased by 2.8% y-o-y to US$14.7 million, attributable to higher linen consumption in Taiwan and the Philippines.

Revenues from Trading, Distribution and others increased almost 27 times to US$27.8 million from US$1.8 million in FY2019 due to higher customer demand on healthcare items.

Though costs of sales and services increased 291.3% y-o-y to US$228.7 million due to the higher demand, FY2020 gross profit surged more than 10 times to US$171.6 million from US$10.5 million previously. This was attributable to significant increases from the group’s segments, offset by a decrease in gross profit for hospital services due to higher labour and linen-amortisation cost.

Gross profit margins (GPM) for the FY2020 surged to 44.1% from 15.3% in FY2019.

Looking ahead, the group says it expects to remain profitable for the FY2021, as PPE and healthcare products continue to remain in demand.

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According to the group, the global PPE market size is expected to grow at a compound annual growth rate (CAGR) of between 6% to 12% between 2020 to 2025.

In addition, the company has expanded its production capacity in Cambodia and the Philippines for key products such as face masks, isolation gowns and other protective apparels in 2020. It adds that it will leverage on the changes post-Covid-19 to broaden its product offering and expand its market share.

A final cash dividend of 4.18 US cents per share has been declared. With the interim dividend of 0.85 US cent per share, the total dividend for FY2020 stands at 5.03 US cents per share. In comparison, no dividend was declared in FY2019.

As at end-December, cash and bank balances at the end of the period stood at US$82.2 million, from US$3.1 million previously. The higher sum is due to higher cash generated from operations.

As at 12pm, shares in Medtecs are trading 6 cents lower or 5.5% down at $1.04.